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Monday, September 20, 2010

In the news: End of recession declared; Lane County stabilizing

The National Bureau of Economic Research (NBER) is responsible for marking the official start and end of economic downturns in the United States. They make such determinations based on a number of economic factors, including GDP and income.

The most recent recession, the so-called Great Recession, began in December 2007. According to NBER, the recession now has an end date: June 2009. This is the month when economic expansion resumed. "The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months."

To most people, it doesn't feel like the recession is over. Concerning indicators include high unemployment and scare job opportunities; elevated foreclosure rates; and low consumer confidence and consumer spending. The important thing to remember is that the official end date does not mean the economy has fully recovered or even that it is rapidly expanding. Rather, it indicates that the economy reached its lowest point, and growth has resumed -- even if that growth feels sluggish.For those concerned about a double-dip recession: the NBER committee which determines the official dates of each recession "decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007."

As regular blog readers know, the University of Oregon publishes a monthly Economic Index for Oregon. On a quarterly basis, UO also updates the index for some of Oregon's metro areas. The Lane Couny Index was released this morning.

The index dropped from the first quarter to the second quarter of 2010, but it was up over the year. According to the report "the incoming data continue to indicate stabilization in the wake of the recession-induced plunge in economic activity during the 2007–9 period. Sustained upward activity, however, remains elusive."

The index for the Portland area and the index for Central Oregon will likely be released in the next few days. You can find them on the UO Economic Forum website: econforum.uoregon.edu

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